The wheat shortage has sent wheat flour price to the zenith in Pakistan.
The fine flour has been selling between 62/kg to Rs70/kg and probably more at some areas.
In some cities, the price of a 100kg flour sack shoots up by Rs500 to Rs5,200. While in other cities wheat flour is disappearing from the market.
What did cause the wheat crisis in Pakistan?
Wheat crisis in Pakistan
(1) There are numerous factors reported, where some are linking the crisis to the transporters strike in Karachi where they were protesting against price hike in petrol prices, which triggered flour supply in the local markets of Sindh. But, it would not have that long-lasting impact.
(2) Another factor which is widely cited is the ban on the inter-provincial movement of wheat between Punjab and KP. This caused wheat flour shortage in KP province. The ban was due to the alleged smuggling of wheat to Afghanistan from KP. This can be true for private traders and local traders. But the big question market is then where is the official wheat reserves.
(3) Mismanagement is another key issue. It is not happening for the first time. The government do not have any early warning system.
(4) Hoarding and the artificial shortage is played by large players.
The below chart also depicts some information about who the wheat crisis in Pakistan unfolded.
Yes, unchecked smuggling to Afganistan can be one of the reasons, but it is not possible without the involvement of high-level officials.
Mismanagement, hoarding, uncheck smuggling to Afganistan and controlled artificial price hike are the key reasons.
Floormills and hoarders probably may have made billions out of the crisis.
Sugar crisis is also emerging, and if the sugar prices and its exports are not properly controlled, the situation would also quickly become unrestrained.